I use the Sulky Solvy wash away and Washable Crayola markers. I experimented with the sharpie and got similar results, luckily, not on a real quilt!
I'm still fairly new at it and my stitches are not perfect yet. I can't imagine picking plastic out of tiny stitches. The Solvy is better for me. I just trim away the large extra pieces and the rest washes out.